Deputy Commissioner of Income Tax, Corporate Circle -3(1), Chennai – 600 034. v. Shriram Finance Ltd.

Parties Involved

Facts Summary

The assessee, Shriram Finance Ltd., filed its return of income and the assessment under section 143(3) of the Income-tax Act, 1961 was concluded on 31.12.2019. The Principal Commissioner of Income Tax (PCIT) invoked section 263 of the Act and treated the order under section 143(3) as erroneous, passing an order on 31.03.2022. The Assessing Officer (AO) then passed an order under section 143(3) read with section 263 of the Act for the assessment year 2017-18, making a disallowance under rule 8D of the Income Tax Rules and recomputing the total income of the assessee. The assessee appealed to the Commissioner of Income Tax (Appeals) (CIT(A)), who deleted the addition made by the AO and allowed the appeal. The revenue appealed to the Income Tax Appellate Tribunal (ITAT), which quashed the order under section 263 of the Act of the PCIT. As a result, the appeal filed by the revenue against the order of the CIT(A) does not survive.…

Legal Issues

• 1. Whether the order of the CIT(A) is contrary to the facts and circumstances of the case.
• 2. Whether the CIT(A) erred in not adjudicating the issue on merit without considering the quashing of the order of the ITAT.
• 3. Whether the CIT(A) failed to consider that the consequential order shall not revive automatically in the event of reversal of the order of the ITAT.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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